Watch Your Step: Size of Legal Malpractice Claims Increasing

Author: Sharon Berman | April 24, 2013

Legal malpractice, or avoiding it, is a topic that is at the back of every attorney’s mind.  I learned more about the subject at a recent Association of Business Trial Lawyers (ABTL) meeting.  A panel, moderated by the Honorable Lee Smalley Edmon, LA Superior Court Judge, presented a program titled “Do You Have a Target On Your Back?” This program examined the increase in legal malpractice cases and what steps attorneys can take to prevent them.

According to Kurt C. Peterson with Reed Smith, legal malpractice lawsuits were rare occurrences 25 years ago. However, attorneys who are embarking on their professional lives now can expect to face an average of three legal malpractice suits against them over the course of their career – and the size of the claims is increasing.

Malpractice cases usually fall into one of three areas: real estate, corporate and securities, or trust and estates. Frequently cited reasons for malpractice claims include missed deadlines, missed laws, clerical error, and conflicts. With these commonalities in mind, the panel offered suggestions to lawyers looking to sidestep such messy legal entanglements. These tips include:

  1. Utilize discretion when taking on a new client. As James P. Fogelman with Gibson, Dunn, & Crutcher LLP pointed out, if a client has already sued another attorney, it raises serious red flags.
  2. Make sure your firm has a strong system for conflict checking, especially if there are partners in other offices. Disparate locations can lead to confusion and disorganization.
  3. Stay on top of fees by billing and collecting regularly. This helps eliminate the possibility of a huge outstanding amount that a client might try to sue as opposed to paying.
  4. Be very specific regarding what you plan to do and who you’re representing in your engagement letter. Some attorneys have been sued by individuals who they didn’t even consider to be clients, underscoring the importance of laying out the specifics of each engagement in writing beforehand in order to manage client expectations.
  5. Retainer agreements are similarly important, according to Paul A. Traina with Engstrom, Lipscomb, & Lack. Attorneys often forget the scope of the retainer agreement during litigation, and conflicts may arise or new parties are added in practice. These agreements should also have conflict waivers, which many top defense firms neglect to include, at their own peril.
  6. Mr. Fogelman also pointed out that the wise attorney sends a termination letter at the end of an engagement – an important step that tells the client, “Thank you for allowing us to represent you. This matter is concluded.”
  7. Finally, if an error is made, don’t hide your mistakes. Be upfront about them, and you can hope to lessen the blow and avoid a lawsuit later on.

The essence of preventing legal malpractice really comes down to good client service and meticulous recordkeeping and communication. If attorneys make a concerted effort to put things in writing and to communicate clearly and regularly with clients, the incidence of legal malpractice suits will surely diminish over time.

 

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